Enterprise Budget Meadowfoam Seed, Willamette Valley Region Bart Eleveld, Extension Economist, Tom Silberstein, Extension Agent, Marion County, Mark Mellbye, Extension Agent, Linn County, Bill Young, Extension Seed Production Specialist, Oregon State University AEB 0018, November 2010 This enterprise budget estimates the typical costs of producing meadowfoam seed in the Willamette Valley of Oregon. Meadowfoam is an annual oilseed crop that can be produced with the machinery and equipment typically used by grass seed and grain producers. While efforts were made to reflect common practices, this budget does not represent any particular farm and thus should be used only as a guide to estimating actual costs. Assistance provided by area producers is greatly appreciated. Several Willamette Valley seed, grain and forage budgets were estimated as a group and are presented in a similar, consistent format. Table 1 shows the summary returns and cost information, with inputs grouped by various categories. Table 2 shows itemized details about the cultural operations performed, and their costs, in a chronological sequence. Table 3 shows break-even prices and net returns around the assumed price and yield for the crop. Land and Cropping Pattern This budget is based on a farm with 1200 acres in continuous production of grass seeds or related, similar technology crops such as small grains, oil seeds and forage seeds. Historically, most of the acreage in the Willamette Valley has been in grass seeds, with wheat as a rotation crop, but with the declining grass seed prices and several recent years with strong grain prices, wheat, other grains and oil seed crops have been much more widely planted. The budget estimates establishment costs on a per-acre basis. A land lease charge of $90 per acre is included to represent the cost of leasing or owning land. Land cost varies depending on specific location and competition for production of alternate crops. Labor and Capital Hired labor typically costs approximately $16 per hour including worker s compensation, FICA, and other payroll expenses. For this study, all labor is treated as owner/operator labor valued at $16 per hour, and is assumed to be a cash cost. For mechanized operations, labor hours are calculated based on machinery hours. Opportunity costs of capital are charged at a rate of 10 percent for current and intermediate capital provided by the owner/operator. Machinery and Equipment The machinery complement is sufficient to farm 1200 production acres. Late 2010 replacement costs are used, assuming the machinery is half depreciated. Table 4 (subdivided into A, B, C and D sections) shows the cost of operating owned machinery in the cultural practices used in this and several related Willamette Valley seed, grain and forage budgets. Your machinery costs may differ. Cultural Practices The budget shows farming operations in the order they typically are performed. See Table 2, for details of operations, Results Table 1 shows the costs and returns for meadowfoam production. The negative net returns do not necessarily translate into a loss in the common interpretation of the word. These budgets include investment costs for all owned resources, such as land and machinery as well as the cost of owner labor. These may not be cash costs for many operators. The field operations and their costs are detailed in Table 2. The break-even prices needed to cover the total cost of production is given in Table 3. The break-even price of $0.73 per pound is considerably higher than the $0.65 price per pound assumed in the budget. Please note that at the breakeven price, returns over total costs at the assumed (100%) budget yield are zero by definition all costs would be covered. Table 3 also shows the sensitivity of returns over variable (or operating costs) and returns over total costs (net profit) as either prices or crop yields are varied. Meadowfoam Seed, Willamette Valley Region, Page 1
Meadowfoam Seed, Willamette Valley Region, Page 2
Table 1.A Estimated costs and returns per acre Meadowfoam Seed, Production Willamette Valley, 2010 ITEM UNIT PRICE QUANTITY AMOUNT YOUR FARM dollars dollars INCOME Meadowfoam Seed lb 0.65 850.0000 552.50 --------- TOTAL INCOME 552.50 DIRECT EXPENSES CHEM--FERTILIZER 16-20-0-14 LB lb 0.37 100.0000 37.00 40-0-0-6 LB lb 0.21 100.0000 21.00 MISC BUS EXP Misc. business exp acre 30.00 1.0000 30.00 CUSTOM, FLAT RATE Custom Lime MF ton 50.00 0.3000 15.00 Bee Pollination hives 40.00 2.0000 80.00 Harvest Truck mile 5.50 1.0000 5.50 CHEM--HERBICIDE Dual gal 109.00 0.0830 9.05 GlyphosateGAL3 gal 15.00 0.1660 2.49 Clethodim gal 120.00 0.0938 11.26 SEEDS & PLANTS Meadowfoam Seed lb 0.80 30.0000 24.00 CUSTOM, YIELD PROP. Seed Cleaning MF lb 0.01 750.0000 9.00 Loading Charge lb 0.00 750.0000 1.50 Operator Labor Self-Propelled hour 8.65 0.2104 1.82 Machinery Labor Tractors hour 16.00 1.4755 23.61 Self-Propelled hour 16.00 0.3513 5.63 DIESEL FUEL Tractors gal 3.00 12.8670 38.60 Self-Propelled gal 3.00 3.8927 11.67 REPAIR & MAINTENANCE Implements acre 4.85 1.0000 4.85 Tractors acre 17.87 1.0000 17.87 Self-Propelled acre 22.91 1.0000 22.91 INTEREST ON OP. CAP. acre 19.37 1.0000 19.37 --------- TOTAL DIRECT EXPENSES 392.13 RETURNS ABOVE DIRECT EXPENSES 160.37 FIXED EXPENSES Implements acre 10.63 1.0000 10.63 Tractors acre 48.26 1.0000 48.26 Self-Propelled acre 60.82 1.0000 60.82 Land Rent SV each 90.00 1.0000 90.00 Pickup each 6721.63 0.0008 5.60 Mach/Equip Ins, Hi each 6.95 1.0000 13.90 --------- TOTAL FIXED EXPENSES 229.21 --------- TOTAL SPECIFIED EXPENSES 621.34 RETURNS ABOVE TOTAL SPECIFIED EXPENSES -68.84 Meadowfoam Seed, Willamette Valley Region, Page 3
Table 2.A Estimated resource use and costs for field operations, per acre Meadowfoam Seed, Production Willamette Valley, 2010 POWER UNIT COST EQUIPMENT COST ALLOC LABOR OPERATING/DURABLE INPUT OPERATION/ SIZE/ POWER UNIT PERF TIMES -------------- -------------- ------------- ----------------------- TOTAL OPERATING INPUT UNIT SIZE RATE OVER MTH DIRECT FIXED DIRECT FIXED HOURS COST AMOUNT PRICE COST COST ------------dollars----------- dollars ---------dollars--------- FLAIL 1.00 Sep Flail 14 ft 140 0.157 6.50 4.33 0.95 1.44 0.18 2.89 16.11 PLOW 1.00 Sep Moldboard Plow 6 bottom 215 0.196 14.91 14.78 1.77 2.66 0.22 3.61 37.73 HARROW 1.00 Sep Dixon Harrow MF 16 ft 180 0.350 13.56 11.41 0.18 0.45 0.40 6.44 32.04 HARROW & ROLL 1.00 Sep Roller MF 18 ft 180 0.350 13.56 11.41 0.60 2.23 0.40 6.44 34.24 Dixon Harrow MF 16 ft 0.350 0.18 0.45 0.63 LAND LEVEL 1.00 Oct Land Leveler MF 16 ft 140 0.040 1.26 1.10 0.18 1.37 0.04 0.74 4.65 LIME 1.00 Oct Custom Lime MF ton 0.3000 50.00 15.00 15.00 DITCHING 1.00 Oct Ditcher 140 0.050 1.59 1.38 0.03 0.11 0.05 0.92 4.03 PLANT 1.00 Oct Drill 13 ft 140 0.139 5.09 3.85 0.96 1.92 0.16 2.57 14.39 Meadowfoam Seed lb 30.0000 0.80 24.00 24.00 16-20-0-14 LB lb 100.0000 0.37 37.00 37.00 WINTER BROADLEAF CTL 1.00 Dec Spray Bug60 7 mph 60' 0.030 1.22 1.93 0.03 0.56 3.71 Dual gal 0.0830 109.00 9.05 9.05 GlyphosateGAL3 gal 0.1660 15.00 2.49 2.49 FERTILIZE - SPRING 1.00 Mar Fertilizer Buggy 20 0.070 1.79 1.41 0.08 1.30 4.50 40-0-0-6 LB lb 100.0000 0.21 21.00 21.00 SPRING BROADLEAF CTL 1.00 Apr Spray Bug60 7 mph 60' 0.030 1.22 1.93 0.03 0.56 3.71 Clethodim gal 0.0938 120.00 11.26 11.26 BEE POLLINATION 1.00 May Bee Pollination hives 2.0000 40.00 80.00 80.00 WINDROWING 1.00 Jun Swather 15' 0.174 6.36 8.13 0.20 3.21 17.70 COMBINE 1.00 Jun Combine 300 slow 300 hp 0.210 23.99 47.42 0.21 1.82 73.23 HAUL SEED 1.00 Jun Harvest Truck mile 1.0000 5.50 5.50 5.50 CLEAN SEED 1.00 Jul Seed Cleaning MF lb 750.0000 0.01 9.00 9.00 LOADING CHARGE 1.00 Jul Loading Charge lb 750.0000 0.00 1.50 1.50 MISCELLANEOUS 1.00 Jul Misc. business exp acre 1.0000 30.00 30.00 30.00 Pickup each 1.00 Jul 5.60 0.0008 5.60 Land Rent SV each 1.00 Jul 90.00 1.0000 90.00 Mach/Equip Ins, Hi each 1.00 Jul 6.95 1.0000 6.95 Mach/Equip Ins, Hi each 1.00 Jul 6.95 1.0000 6.95 ------- ------- ------- ------- ------ ------- ------- -------- TOTALS 91.05 109.08 4.85 120.13 2.03 31.06 245.80 601.97 Meadowfoam Seed, Willamette Valley Region, Page 4
INTEREST ON OPERATING CAPITAL 19.37 UNALLOCATED LABOR 0.00 TOTAL SPECIFIED COST 621.34 Meadowfoam Seed, Willamette Valley Region, Page 5
Table 3.A Breakeven price above total expenses and net returns for price/yield combinations, per acre Meadowfoam Seed, Production Willamette Valley, 2010 -------------------------------------------BREAKEVEN PRICE---------------------------------------- Meadowfoam Seed 0.49 0.52 0.56 0.61 0.66 0.73 3 0.80 0.90 1.03 1.20 1.43 PERCENT YIELD UNIT ---------------------------------------------dollars---------------------------------------------- 50 425.00 lb -170¹ -155-139 -120-97 -70-37 4 58 129 229-399² -385-368 -349-326 -299-266 -224-171 -99 0 60 510.00 lb -130-113 -93-70 -43-10 29 79 143 229 349-359 -342-322 -299-272 -239-199 -149-85 0 119 70 595.00 lb -90-70 -47-20 11 49 96 154 229 329 468-319 -299-276 -249-217 -179-133 -74 0 99 239 80 680.00 lb -50-27 -1 29 65 109 162 229 314 428 588-279 -256-230 -199-163 -119-66 0 85 199 359 90 765.00 lb -10 15 44 79 120 169 229 304 400 528 708-239 -213-184 -149-108 -59 0 74 171 299 479 100 850.00 lb 29 58 90 129 174 229 295 378 485 628 828-199 -171-138 -99-54 0 66 149 256 399 599 110 935.00 lb 69 100 137 179 229 289 362 453 571 728 948-159 -128-92 -49 0 59 133 224 342 499 718 120 1020.00 lb 109 143 183 229 283 349 428 528 657 828 1067-119 -85-46 0 54 119 199 299 427 599 838 130 1105.00 lb 149 186 229 279 338 408 495 603 742 928 1187-79 -42 0 49 108 179 266 374 513 698 958 140 1190.00 lb 189 229 275 329 392 468 562 678 828 1028 1307-39 0 46 99 163 239 332 449 599 798 1078 150 1275.00 lb 229 272 321 378 447 528 628 753 913 1127 1427 0 42 92 149 217 299 399 524 684 898 1198 ¹The top number in each cell is Returns Above Direct Expenses. ²The bottom number in each cell is Returns Above Total Specified Expenses. 3 This is the breakeven price at the assumed (100%) budget yield. Prices to the left and right are for higher and lower yield levels. Only the product listed has been varied to calculate net returns. Meadowfoam Seed, Willamette Valley Region, Page 6
Meadowfoam Seed, Willamette Valley Region, Page 7
Table 4.A Tractors/Harvesters: estimated purchase price, annual use, useful life, fuel use, and direct and fixed cost per hour, 2010 Purchase Annual Useful Fuel Labor Fuel R&M Total Fixed Total Item Name Size Price Use Life Use Direct Cost dollars hours years gal/hr ----------------$/hour---------------- Tractor 130 130 95,700 400 20 6.57 16.00 19.73 11.96 47.69 27.26 74.96 Tractor 140 140 121,000 500 20 6.50 16.00 19.50 12.10 47.60 27.58 75.18 Tractor 160 160 113,000 470 20 11.00 16.00 33.00 9.61 58.61 27.40 86.01 Tractor 180 Oper. 180 143,000 500 20 9.10 16.00 27.32 11.44 54.76 32.59 87.35 Tractor 200 200 154,000 550 20 10.12 16.00 30.36 11.20 57.56 31.91 89.47 Tractor 215 215 165,000 250 20 11.00 16.00 33.00 26.40 75.40 75.21 150.61 Tractor 250 250 220,000 250 20 11.00 16.00 33.00 35.20 84.20 100.29 184.49 Tractor 310 310 231,000 500 20 15.68 16.00 47.05 18.48 81.53 52.65 134.19 Notes: Labor: Includes allocated labor from power unit. Total Direct: Does not include interest on operating capital. Table 4.B Self-propelled machines: estimated purchase price, annual use, useful life, fuel use, performance rate, and direct and fixed cost per acre, 2010 Purchase Annual Useful Fuel Perf Labor Fuel R&M Total Fixed Total Item Name Size Price Use Life Use Rate Direct Cost dollars hours years gal/hr hr/ac ----------------$/acre---------------- ATV 20 hp 5,600 200 10 1.38 0.050 0.92 0.20 0.14 1.26 0.21 1.47 Combine 300 300 hp 300,000 200 10 8.00 0.168 1.67 4.04 15.15 20.86 37.93 58.80 Combine 300 slow 300 hp 300,000 200 10 8.00 0.210 1.82 5.05 18.94 25.81 47.41 73.22 Fertilizer Buggy 20 35,000 200 20 5.52 0.070 1.29 1.16 0.61 3.08 1.40 4.48 Fertilizer Buggy 30 44,000 200 20 6.50 0.047 0.86 0.91 0.51 2.29 1.17 3.47 Fertilizer Buggy OB 80 35,000 200 20 5.52 0.056 1.03 0.92 0.49 2.44 1.11 3.56 Spray Bug100 7mph 100' 190,000 300 20 8.00 0.014 0.14 0.35 0.32 0.82 1.06 1.88 Spray Bug40 4mph 40' 60,000 250 20 7.00 0.079 1.45 1.66 0.66 3.79 2.16 5.96 Spray Bug60 10mph 60' 140,000 250 20 7.00 0.021 0.38 0.44 0.41 1.24 1.34 2.59 Spray Bug60 7 mph 60' 140,000 250 20 7.00 0.030 0.55 0.63 0.59 1.78 1.92 3.71 Spray Bug80 7 mph 80' 163,000 300 20 5.52 0.021 0.38 0.34 0.40 1.13 1.30 2.43 Swather 15' 62,000 200 10 8.00 0.174 3.21 4.19 2.16 9.56 8.12 17.69 Notes: Labor: includes allocated labor plus any additional labor from self-propelled machine. Direct: Does not include interest on operating capital. Meadowfoam Seed, Willamette Valley Region, Page 8
Table 4.C Implements: estimated purchase price, annual use, useful life, performance rate, and direct and fixed cost per acre, 2010 Power Purchase Annual Useful Perf Labor Fuel ---R&M---- Total --Fixed--- Total Item Name Size Unit Price Use Life Rate Imp. P.U. Direct Imp. P.U. Cost dollars hours years hr/ac ----------------------$/acre--------------------- 3-Point Blade 10 ft 140 3,500 100 20 0.050 0.80 0.97 0.00 0.60 2.38 0.19 1.37 3.96 Chisel Plow 21 ft 310 20,000 100 20 0.143 2.28 6.73 1.07 2.64 12.73 3.26 7.53 23.53 Cultimulcher 12 ft 140 7,000 150 10 0.140 2.24 2.73 0.13 1.69 6.79 0.98 3.86 11.63 Cultipacker 20 ft. 180 10,000 200 10 0.097 1.55 2.65 0.38 1.11 5.70 0.72 3.16 9.59 Disk 20 215 28,000 200 10 0.097 1.55 3.20 0.81 2.56 8.13 2.04 7.30 17.47 Disk 27 310 35,000 200 10 0.071 1.15 3.38 0.75 1.32 6.61 1.88 3.78 12.29 Ditcher 140 2,000 100 20 0.050 0.80 0.97 0.02 0.60 2.40 0.11 1.37 3.89 Dixon Harrow MF 16 ft 180 3,000 350 10 0.350 5.60 9.45 0.18 3.53 18.76 0.45 10.06 29.27 Drill 13 ft 140 11,000 120 10 0.139 2.23 2.71 0.95 1.68 7.59 1.92 3.84 13.36 Field Cultivator 45 ft 130 27,000 120 20 0.066 1.07 1.32 0.52 0.80 3.72 1.71 1.82 7.26 Flail 14 ft 140 14,500 180 20 0.157 2.51 3.06 0.94 1.90 8.42 1.44 4.33 14.20 Flail J Knife 15 ft 180 13,500 180 12 0.132 2.12 3.63 1.24 1.52 8.52 1.37 4.33 14.23 Harrow 20 ft 180 15,000 350 10 0.138 2.21 3.74 0.35 1.39 7.71 0.89 3.98 12.59 Harrow/Cultipacker 16ft 160 15,000 200 10 0.125 2.00 4.12 0.56 1.20 7.88 1.40 3.42 12.72 Land Leveler 24 ft 140 12,000 35 25 0.114 1.83 2.23 0.78 1.38 6.23 4.24 3.16 13.64 Land Leveler MF 16 ft 140 8,000 35 10 0.040 0.64 0.78 0.18 0.48 2.08 1.37 1.10 4.56 Moldboard Plow 6 bottom 215 18,000 200 10 0.196 3.14 6.48 1.76 5.18 16.57 2.65 14.77 34.00 No-Till Drill 15 ft 160 37,000 80 15 0.100 1.60 3.30 2.31 0.96 8.17 5.78 2.74 16.70 Ripper 12 ft 180 12,000 200 10 0.207 3.32 5.68 0.93 2.37 12.32 1.87 6.77 20.97 Rol-Har/Dix/Rol 21 ft 200 43,000 200 10 0.076 1.23 2.33 0.99 0.86 5.42 2.48 2.45 10.36 Roller 20 ft 180 10,000 200 10 0.114 1.83 3.09 0.22 1.15 6.31 0.86 3.29 10.46 Roller MF 18 ft 180 8,500 200 10 0.200 3.20 5.40 0.34 2.01 10.95 1.27 5.75 17.98 Roller-Harrow 21 ft 200 21,000 200 10 0.076 1.23 2.33 0.48 0.86 4.91 1.21 2.45 8.58 Notes: Labor: Includes labor from Power unit plus additional labor from the implement. Total Direct: Does not include interest on operating capital. Table 4.D Single durable inputs: estimated purchase price, annual use, useful life, fuel consumption rate, labor, fuel, R&M, total direct, fixed and total cost per year,, 2010 Item Name Unit of Purchase Annual Useful Fuel Operation Labor Fuel R&M Total Fixed Total Measure Price Use Life Use Time Direct Cost dollars miles years gal/hr hr/mile $/yr $/yr $/yr $/yr $/yr $/yr ATV mi 4,500 2000 10 1.00 0.0333 663.10 189.98 225.00 1078.08 675.88 1753.96 Harvest Truck mile 30,000 1000 10 3.50 0.0285 525.68 299.98 1500.00 2325.67 4505.88 6831.56 Pickup mile 33,000 10000 6 5.00 0.0200 3680.00 3000.00 1650.00 8330.00 6721.63 15051.63 Truck w/ Tank mile 36,000 1500 10 3.50 0.0285 788.53 449.97 1800.00 3038.50 5407.06 8445.57 Notes: Labor: Includes allocated labor from the durable input. Total Direct: Does not include interest on operating capital. Meadowfoam Seed, Willamette Valley Region, Page 9
2010 Oregon State University. This publication may be photocopied or reprinted in its entirety, without change, for noncommercial purposes. Produced and distributed in furtherance of the Acts of Congress of May 8 and June 30, 1914. Extension work is a cooperative program of Oregon State University, the U.S. Department of Agriculture, and Oregon counties. Oregon State University Extension Service offers educational programs, activities, and materials without regard to race, color, religion, sex, sexual orientation, national origin, age, marital status, disability, and disabled veteran or Vietnam-era veteran status as required by Title VI of the Civil Rights Act of 1964, Title IX of the Education Amendments of 1972, and Section 504 of the Rehabilitation Act of 1973. Oregon State University Extension Service is an Equal Opportunity Employer. Meadowfoam Seed, Willamette Valley Region, Page 10